Actual U.S. Military Spending Reached US$ 1.537 Trillion in 2022—More than Twice Acknowledged Level (US$ 765.8 billion)

By Gisela Cernadas and John Bellamy Foster

New Estimates Based on U.S. National Accounts

November 2023 – For decades, it has been recognized by independent researchers that actual U.S. military spending is approximately twice the officially acknowledged level.¹ In 2022, actual U.S. military spending reached $1.537 trillion—more than twice the officially acknowledged level of $765.8 billion. Data on U.S. military spending reported by the U.S. government, the Stockholm International Peace Research Institute (SIPRI, generally considered the definitive source on international military expenditures), and NATO all primarily rely on the figures of the U.S. Office of Management and Budget (OMB).² These data, however, are subject to two major shortcomings.First, the numbers provided by the OMB with respect to “defense spending” are substantially lower than those provided in the U.S. National Income and Product Accounts (NIPA), the most complete and definitive source on U.S. national income and expenditures as a whole, constituting an input-output approach to the whole economy, and the basis of all analysis of the U.S. economy.

Second, as is well-known, key areas of U.S. military spending are included in other parts of federal expenditures and do not fall under the OMB’s “defense spending” category. Although SIPRI and NATO adopt wider definitions of “defense spending” than the U.S. government and claim to increase their estimates using the OMB figures as a base, in practice, they do so only marginally and in ways that are not entirely transparent, with the result that their figures are only slightly above those of the officially acknowledged U.S. figures.3

If the reality is that actual U.S. military spending has been consistently around twice the acknowledged amounts—something demonstrated repeatedly in independent studies—the methodology for approaching the question of actual military spending on a consistent, statistically conservative, and incontestable basis has only developed over time. Most attempts have sought simply to add components of actual military spending appearing in other parts of federal spending and not included under OMB figures for “national defense.” Although these studies helped to set the stage, they often appeared to have a scattered and arbitrary character, rather than employing a truly consistent methodology.

A breakthrough in this respect was first achieved by Jurgen M. Brauer at Augusta State University’s College of Business Administration in 2007. Brauer introduced an approach that took the NIPA data on U.S. military consumption and investment expenditures as the base for U.S. military spending, and then added in other military expenditures outside of official defense using the NIPA accounts, creating a methodology for detailing U.S. military expenditures that not only surmounted the limitations of the OMB data with respect to accounting for “defense spending” itself, but adopted an entirely consistent approach, based on NIPA data, to adding in unacknowledged expenditures.4 Brauer’s approach was then developed further by Hannah Holleman, John Bellamy Foster, and Robert W. McChesney in an article in Monthly Review in 2008 that provided detailed estimates of actual U.S. military expenditures, as opposed to those officially acknowledged by the OMB, for 2007.5

Although the estimates of military spending here rely on the 2008 study by Holleman, Foster, and McChesney (building on Brauer’s 2007 methodological breakthrough) as its original basis, the method and results differ somewhat from that earlier study, adopting more conservative assumptions, while incorporating some refinements that Brauer introduced in 2019. Thus, the percentages attributed to the military in federal space expenditures and in grants to foreign countries are lower in the present estimates, in accord with widely accepted mainstream assumptions. Military medical insurance (consisting of payments for medical services for dependents of active duty military personnel at nonmilitary facilities) is also added, which was not included in the earlier study by Holleman, Foster, and McChesney. (It should be noted that military spending in the Department of Energy associated with nuclear weapons is included in both OMB and NIPA, as recognized in the earlier study.)

In addition to the NIPA data for total defense consumption and gross investment expenditures, our figures for actual U.S. military expenditures include seven further categories: veterans’ benefits, veterans’ life insurance, other veterans’ costs, military medical insurance, the military portions of space spending, grants in aid to other governments, and the share of net interest attributed to actual federal military expenditures. (Net interest here includes only “on-budget” net interest, excluding the “off-budget” net interest associated with Social Security and other transfer payments, as well as the Post Office.)

Veterans’ benefits and net interest both constitute what are known as so-called legacy costs of militarism and war, and thus are part of overall military spending, but are not included in the official “defense budget.” Euroconsult has attributed 42.4 percent of federal space consumption and investment expenditure to the military.6 The Council of Foreign Relations conservatively classified 33 percent of all U.S. grants in foreign aid as for military purposes.7

All of these categories, taken together, thus constitute the components of actual military spending as shown in Table 1. The table shows that actual U.S. military spending in 2022 came to $1.537 trillion, as opposed to the $765.8 billion in acknowledged (OMB) defense spending (and the $876 billion estimated by SIPRI and $821 billion by NATO). This means that actual U.S. military spending in 2022 was more than double the acknowledged “defense spending” provided by OMB.